The standard joke in motorsports paddocks around the world is that the way to make a small fortune in motor racing is to start off with a large one. MotoGP - like all other forms of motorsports - costs a lot of money, and somebody has to pay for it. The question of how much MotoGP costs - and how much money it generates - is an interesting one, and not one to which many people have a ready answer.
Fortunately, the leading Italian MotoGP website GPOne.com have dived into the subject, and come up with some fascinating answers. GPOne's Alice Margaria spoke to Dorna SL's Chief Operating Officer and Managing Director Enrique Aldana, and enquired about the financial side of Dorna's business. Dorna's turnover, Aldana revealed, was 168 million euros in 2009, with the company expecting to earn around 210 million in 2010. From that income, Dorna expects to turn a profit of some 5-8 million euros. Most of Dorna's income is from the sale of TV rights - a potential risk for the future, as the internet continues to encroach on traditional broadcast channels, but Dorna has spread the risk across a wide range of broadcasting outlets. Spain and Italy remain the biggest market - their relative strengths reflecting the state of on track competition, with Spain now picking up the slack, as Jorge Lorenzo looks like taking a championship from his Fiat Yamaha teammate Valentino Rossi.
The GPOne article is a great piece of research, and it immediately highlights MotoGP's main problems. Dorna's official figures for MotoGP's global TV audience is around 300 million for each Grand Prix, an impressive figure, and about half that of Formula One's audience of around 600 million per race. But looking at the revenue MotoGP generates from those audiences is worrying. Where MotoGP generates 200 million euros, Formula One's turnover is over $1 billion, around 780 million euros. In other words, Formula One generates four times the income from double the TV figures.
More worrying than this is the fact that where Dorna generates 5 million euros in profits, FOA (the commercial rights holder for Formula One) booked an operating profit of $420 million last year, or 330 million euros, or 66 times the profits generated by MotoGP. Dorna Sports Management SL paid around 580 million euros for the shares owned in it by CVC (the equity company which owns FOA), and the 5 to 8 million a year that MotoGP currently generates will not qualify as a good return on investment for that kind of sum.
Valentino Rossi's switch to Ducati could not have come at a better time for Dorna, which was one of the reasons the company pushed so hard to achieve the switch - that and the fact that Rossi's move provides excellent cover to help disguise that there will still only be 18 bikes on the grid in 2011. But it's clear that there is a lot more work to be done if MotoGP is to capitalize on its potential.